Correlation Between Vanguard Equity and Kayne Anderson
Can any of the company-specific risk be diversified away by investing in both Vanguard Equity and Kayne Anderson at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vanguard Equity and Kayne Anderson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Equity Income and Kayne Anderson Renewable, you can compare the effects of market volatilities on Vanguard Equity and Kayne Anderson and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vanguard Equity with a short position of Kayne Anderson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Equity and Kayne Anderson.
Diversification Opportunities for Vanguard Equity and Kayne Anderson
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and Kayne is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Equity Income and Kayne Anderson Renewable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson Renewable and Vanguard Equity is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vanguard Equity Income are associated (or correlated) with Kayne Anderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kayne Anderson Renewable has no effect on the direction of Vanguard Equity i.e., Vanguard Equity and Kayne Anderson go up and down completely randomly.
Pair Corralation between Vanguard Equity and Kayne Anderson
Assuming the 90 days horizon Vanguard Equity Income is expected to under-perform the Kayne Anderson. But the mutual fund apears to be less risky and, when comparing its historical volatility, Vanguard Equity Income is 1.26 times less risky than Kayne Anderson. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Kayne Anderson Renewable is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 960.00 in Kayne Anderson Renewable on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Kayne Anderson Renewable or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vanguard Equity Income vs. Kayne Anderson Renewable
Performance |
| Timeline |
| Vanguard Equity Income |
| Kayne Anderson Renewable |
Vanguard Equity and Kayne Anderson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Equity and Kayne Anderson
The main advantage of trading using opposite Vanguard Equity and Kayne Anderson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Equity position performs unexpectedly, Kayne Anderson can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kayne Anderson will offset losses from the drop in Kayne Anderson's long position.| Vanguard Equity vs. Vanguard Dividend Growth | Vanguard Equity vs. Vanguard Wellesley Income | Vanguard Equity vs. Vanguard Wellington Fund | Vanguard Equity vs. Vanguard Growth And |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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